Music Industry News - as it happensSource: MusicDish/Mi2N - April 10, 2002

The International Webcasting Association (IWA) wants the House Judiciary
Committee on the effect of copyright law on webcasting to go past its May
deadline to give the Subcommittee on Courts, the Internet, and Intellectual
Property that's reviewing digital music issues and related proposals to
amend the Copyright Act, "more time for review of items like the Fairness in
Music Listening Act."

As things stand, the Copyright Office must recommend acceptance, rejection
or modification of rates and terms in the highly polemic CARP (Copyright
Arbitration Royalty Panel) report by May 21.

"Simply put, the CARP recommended royalty rate structure, if implemented,
will transform one of the most vibrant and diverse music distribution
channels into broadcast radio's ugly twin," said Eric de Fontenay in the
MusicDish lead story last week.

.".. the panel recommendations would provide a small set of firms that
already control one media platform an inordinate advantage to compete and
control the emerging webcasting sector. The implications represent not only
a blow to nearly a century of public policy, but a profound loss for
webcasters, musicians and consumers," he said.

In its hand-delivered filing, the IWA made a number of recommendations to
allow copyright owners, "to be compensated while allowing webcasting to grow
to its full promise, including an exemption for small webcasters."

Peggy Miles, IWA Chair Emeritus, said, "Music webcasters provide an
important service to an under-served public. Since the consolidation of
traditional broadcasting, there has been a growing need for more diverse and
varied programming. Webcasters fill this need by providing specialized and
niche programming now unavailable on terrestrial radio.

"Webcasters offer listeners the opportunity to be one with a community of
like listeners, no matter where they live or listen."

RIAA

But RIAA CEO and President Hilary 'Reach Out' Rosen asks, on the RIAA web
page, "What's All The Fuss About?"

Already on record as saying, .".. in setting a rate that is about 10 times
that proposed by the webcasters, the panel clearly concluded that the
webcasters' proposal was unreasonably low and not credible," Rosen now says
the CARP rates have become the subject of an intense "misinformation and
propaganda campaign (so called 'grassroots' but really ginned up by
sophisticated lobbyists in D.C.) - waged through the news media, emails to
Capitol Hill and numerous Internet sites. The goal is to scare
non-commercial webcasters - including college radio stations and so-called
hobbyists - and their members of Congress into thinking that the CARP rates
are going to drive non-commercial webcasters out of business."

To the contrary, she says, the CARP rates will enable webcasters to "thrive"
because most of the fee projections reported in the news media, "make the
erroneous assumption that every listener who ever logs into a given
non-commercial webcast remains logged into the site 24 hours per day, 7 days
per week, 365 days per year. This assumes that no one ever logs off and
listeners only visit that particular site. The notion that people stayed
logged on 24 hours a day, 7 days a week, is preposterous and the subject of
gross exaggerations."

She adds, "Webcasters have many costs, but one of the least expensive is the
music that is the foundation of their business. Musicians and artists should
not be forced to subsidize the profit margin of webcasters like MTV,
Microsoft, AOL Time Warner and others."